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To be financially successful, AgroEstacion needed to expand its operation and enlarge its network. The TMT and the managers from both ANSA and AgroEstacion knew that. To be profitable, the project needed at least seven franchisees operating. This fact triggered the Networking for Expansion phase.

Develop the Executive Advisory Board. In the same researcher workshop in which the Growth Forum was conceived, we also came up with the idea of creating an executive advisory board. The main objective was to invite influential people from diverse fields—business, academia, and government—to join the board and contribute new ideas and viewpoints, but more important, to contribute through their networks. The

members of this board will be selected based on their reputation, experience, and networking capability. Given AgroEstacion’s BOP orientation, the possibility of exploiting the networks of board members was extensive. The board would be presided over by the President of ANSA. Figure 12 shows the board’s planned structure as of fall 2016. The TMT and AgroEstacion decided that the board’s creation should occur after the opening of at least five to seven AgroEstacion franchisees.

Introduce the AgroEstacion business model to suppliers and governmental officials. Among the plans for 2016, AgroEstacion’s team and ANSA’s TMT intend to present the firm first to suppliers and then to governmental officials. Both teams agreed that AgroEstacion needed to be presented as a functioning entity, and no longer as a project.

To accomplish this required at least six months in operation to present a tangible network on both sides of the model, along with some experiences to talk about. The TMT believed that some of the MNC suppliers might be interested in AgroEstacion’s development. In the follow-up with the TMT on September 28, 2015, the CCO shared exiting news: one of the MNC suppliers’ top managers called him to express his company’s interest in forming a partnership with ANSA to open 17 direct sales stores in different parts of Mexico; the purpose would be to shorten the commercial chain in specific crops, such as berries, vegetables, and sugar cane. The proposed partnership would be exclusively an investment through merchandise and capital with ANSA, and the MNC would have no legal ownership of the stores or interest in buying ANSA’s stocks. “They just wantto push us to open these stores, giving $25,000.00 USD per store in cash and $25,000.00 USD in merchandises, with the unique condition that the stores

must be strongly oriented toward their brand and present publicity related to their company.”

This kind of deal had no precedent in the history of ANSA and came to be seen as a risk due to the level of attention the TMT might focus on this distracting new project— and away from AgroEstacion. Finally, however, the AgroEstacion team convinced the TMT members that both projects were different and complementary: the stores in partnership with the MNC supplier focus on crops other than the corn market and did not emphasize the BOP farmer market. This MNC will be one of the first to which the AgroEstacion team and ANSA’s TMT will present the new firm and the project for the next five years. ANSA’s TMT concurred that, to present this project to a supplier, it must be justified by the accessibility of the supplier’s product line, as well as its ability to be adapted to the BOP corn farmers market.

During the firm’s Christmas party, the CCO from this MNC told ANSA’s CBO and CCO that his company wanted them to travel to Brazil, to their regional office, to meet with their Brazilian counterparts who are reaching the BOP market in a project that also does brokerage of crops.

AgroEstacion managers and ANSA’s TMT agreed that March 2016 would be the right time to present the AgroEstacion project to at least three MNCs suppliers. This revived the preliminary option of a possible JV with an MNC, tailoring the JV to follow the Integrated Model of BOP Strategizing. Although we discarded this JV option in the first stage of the research, we realized it could be attractive to an MNC if the project were appropriately presented. One way to engage an MNC in the strategy might be to develop

the strategy in collaboration with an NGO such as CARE to mediate the operations, thus giving the MNC certainty as to the strategy’s social meaning.

Scout candidates for the next two franchisees. In November 2015,

AgroEstacion’s general manager began the process to choose, through ANSA’s distributors network, the next potentials franchisees to approach in 2016. In addition, in a follow-up interview in early December 2015, he expressed new ideas that emerged during his conversations with other ANSA distributors, one of which was strongly related to a preliminary option in Phase 2 of this project: “There are some distributors that heard about AgroEstacion, and they are interested in get in a partnership with us, but… I think that many of them do not qualify to be an AgroEstacion franchise.” Some of these distributors owned resources in their network, but they also had additional characteristics that disqualified them to be in a PBA with ANSA. One of the local distributors, for example, owned an important network of farmers (knowledge and organizational) and had many years of experience in the corn farming industry. However, the distributor was a partnership between three brothers who were having problems between them related to succession plans. In addition, they could not be considered as BOP because they owned large extensions of land and a big ranch (physical resources). Another local distributor who approached AgroEstacion’s general manager did not own a network of farmers and did not have experience in corn brokerage. However, this gave the general manager an idea: “AgroEstacion could have another service in its business model: we could offer to him (the local distributor) an outsourcing of managerial services, as if he were a franchisee. He had a lot of administrative and fiscal problems, he does not know how to manage his business, so I thought: Why can’t we offer him the management of his store,

and we can put a small sign that say: managed by AgroEstacion. We’ll provide the software and the training, but he will pay a monthly fee and, of course, he will do the investment in equipment and renovations.”

Figure 12 Executive Advisory Board

This idea, which was similar to one of the preliminary seized actionable options in Phase 2, was well perceived by the TMT, and they encouraged the general manager to explore it further.

In the last follow-up interview in mid December, the general manager expressed concerns about beginning the scouting process for new franchisees too soon. He expressed to me that, at this point, he saw great potential in the new firm, but the lack of financial resources available for fast use could compromise AgroEstacion’s strength: “I would like to have the certainty of the cash to buy the fertilizer and seeds for these two [existing] franchisees before thinking of recruiting new ones.” Supplying agrichemical and training had been a smooth process so far because ANSA owned these resources. However, in the case of fertilizer and seeds—specifically, the brand required by the farmer—cash was needed. “I prefer to be sure that I’ll be able to give all that we promise to the franchisees before opening new ones that will tighten our cash availability.”

The outsourcing of managerial service seems to him to be the best next step for AgroEstacion; to achieve it, the firm would need to add an additional person at the end of March 2016. This person’s position would be for “implementation and operational tracing.” The AgroEstacion team discussed the option of offering this position to the woman who led the small Mexico City firm (described in Phase 7.6). Offering the outsourcing service to her small firm would be a first step in transforming her organization into a future franchisee; it would also let the team collect the needed data.

Summary. During the development of this phase, changes began to occur. The development of the Executive Advisory Board was decided upon, and AgroEstacion and ANSA’s team decided that 2016 would be the year to build this board after achieving concrete results with the first two franchisees. Scouting and selecting new franchisees were put on hold until enough capital could be accumulated to fulfill the needs of existing franchisees. Instead, a new service—outsourcing managerial processes—will be added to

AgroEstacion. In addition to creating value, this service might help AgroEstacion identify potential franchisee candidates. Some of ANSA’s local distributors expressed interest in this service. A possible management-outsourcing client for AgroEstacion was also discussed: the small firm run by the woman in Mexico City, who is also a possible third franchisee. Table 27 summarizes the results in this phase.

Table 27 Summary of Networking for Expansion

Firm network BOP network Options Value co-creation

• Convening power of relevant characters from diverse settings and backgrounds • Possible exploitation and commercialization of management capability • Interested local distributors with potential to contract outsourcing service • Design of the outsourcing managerial processes to offer as part of the business model • Executive advisory

board put on hold • Possible outsourcing

client found in third potential franchisee

• Improve the performance of additional distributors

• Create value between ANSA and

additional local distributors (microbusiness)

VIII CHAPTER 8: DISCUSSION

In this dissertation, I have presented my action research study with ANSA, a firm in which I am fully embedded, both professionally and personally. My objective was to help ANSA find a clear way to attack the challenges it currently faces—challenges that are creating problems in the industry, in the market, and within the organization itself, and that could, in the future, put ANSA’s leadership position and possibly its very survival at risk.

This dissertation applied an Integrated Model for BOP Strategizing (Cazares et al., 2015) created during the first stage of the action research in collaboration with a team of researchers and my advisor. The model combines DCT and ODS to help firms

strategize value co-creation with BOP farmers. During the action research, I applied the model to help ANSA develop and begin implementing AgroEstacion, a franchise-based new business targeting the BOP corn farmer segment in Mexico. Overall, I have

presented a detailed account of how this new entity developed as an embedded answer to the research question: How can an agribusiness company strategize and implement the co-creation of value with BOP corn farmers in Mexico? In the following, I present my contributions to addressing ANSA’s problematic situation, to the area of concern, to co- creating value with the BOP farmers, and to the theoretical framework itself (Table 1).